The BGA Australia Team, led by Managing Director Michael “Mick” McNeill, wrote an update on the government’s “Future Made in Australia” policy.

Context

  • Australian Prime Minister Anthony Albanese outlined his government’s approach to attract investment in the energy transition and advanced manufacturing sectors in a major speech on April 11 titled, “A Future Made in Australia.” Albanese will push legislation to coordinate a whole-of-government package of new and existing initiatives to drive investment in areas such as rare earths mining and processing, hydrogen and solar energy production. The government’s preference is for a private sector-led surge of investment, facilitated by government investment when required.

  • Albanese stated his government’s approach is “not old-fashioned protectionism or isolationism — it is the new competition,” pointing to the U.S. Inflation Reduction Act and initiatives in the European Union, Japan, Korea and Canada to strengthen their critical industries. He conceded “Australia cannot go dollar for dollar” with the United States but expressed confidence Australia could compete for international investment. Australia’s national superannuation system — the fourth-largest pool of retirement savings in the world — could play a key investment role.

Significance

  • While historically uncomfortable with free markets, the prime minister — who hails from the Labor Party’s left faction — said the proposed Future Made in Australia Act is not about ideology but about an urgency to respond to the “new and widespread willingness to make economic interventions on the basis of national interest and national sovereignty.” Albanese said the so-called “Washington consensus” has fractured, and Washington itself is pursuing a new direction. He warned that Australia’s economy will suffer without greater government intervention as other nations draw “an explicit link between economic security and national security.”

  • The Future Made in Australia Act will be of key political importance to the government in the lead-up to the next election, set for May 2025 or sooner. Voters with cost-of-living front of mind are looking for tangible benefits from the much-heralded transition to a net-zero economy, and the prime minister has emphasized that a “future made in Australia” is a key pillar on which Labor will seek reelection. Albanese referenced existing initiatives such as the National Reconstruction Fund, the Critical Minerals Facilitation Office, the Hydrogen Headstart Program and the Solar SunShot program. In his speech — delivered in the resource-rich state of Queensland — Albanese pointed to potential benefits for different regions of Australia: “Queensland resources and energy and technology will help make Australia a renewable energy superpower.”

  • The Future Made in Australia Act will be drawn into a political debate over the government’s renewable energy and emissions targets. Opposition Leader Peter Dutton, who is advocating for consideration of nuclear power, said manufacturing businesses in Australia “are going broke under the Labor government” because of their energy and industrial relations policies. Dutton said, “you can’t have Australian Made if Australian businesses are being driven offshore.” Notwithstanding Albanese’s commitment to backing Australia’s comparative advantages, economic purists are skeptical that the initiative is nothing but a risky attempt at picking winners.

Implications

  • Albanese’s speech is indicative of the Labor Party government’s economic ideology and its recognition of the collapsing distinction between economic and security interests. Further details and funding are expected to be released in the May 14 budget ahead of an election that will be called within the next 12 months.

  • The Albanese government will need to balance domestic considerations with the interests of its key strategic partners. The prime minister said Australia would continue to advocate for global markets and free trade as well as bilateral and multilateral cooperation. For instance, Albanese and U.S. President Joe Biden in May 2023 declared climate and energy the third pillar of the Australia-U.S. alliance, joining defense and economic cooperation. This will need to find a balance with the Australia-United States Climate, Critical Minerals and Clean Energy Transformation Compact and the work untaken by ministerial-level Australia-United States Taskforce on Critical Minerals.

If you have questions or comments, please contact BGA Australia Managing Director Michael “Mick” McNeill at mmcneill@bowergroupasia.com.

Best regards,

BGA Australia Team

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Managing Director

Mick is a highly-experienced government relations expert and trusted advisor on consensus building, conflict resolution and legislative developments. He has played an integral role in helping parties achieve desired outcomes in areas of national security, health policy, foreign policy and reputational crisis management, as well as media relations, communications campaigns, immigration and human rights. Mick has two decades’ experience working with government as a media analyst, political adviser and NGO advocacy manager. After a stint serving as an adviser to an Australian senator, Mick took on the role of the locally engaged senior political specialist at the U.S. Embassy in ... Read More